Ben Bernanke is evidently not in the mood for surprises. As expected, the Federal Open Market Committee cut its target for short-term interest rates by a quarter of a point, to 2 percent.

It's the Fed's seventh rate cut since September, and it may be its last for the time being. The statement, issued in conjunction with the rate cut, suggests that the Fed may pause its tightening as it keeps an eye on signs of rising inflation.

"The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity," the Fed statement said.

Fed watchers believe that the reference to cumulative actions is a signal that the Fed may stop cutting rates for now.  

Despite the series of rate cuts, the economy has continued to slow and inflationary pressures remain high. The Fed indicated that the tight credit market and the housing slump will likely continue to quell economic growth "over the next few quarters."

The Fed also expects energy and commodity prices, which have risen at a rapid pace during recent months, will level out in "coming quarters," and that inflation will moderate.

It left the door open for further measures, however. "The committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability," it wrote.

Eight members of the committee approved the rate cut. Charles Plosser and Richard Fisher voted to keep rates unchanged.

The market had a cool reaction to the news. The Dow Jones industrial average, which had been up more than 100 points for most of the day, lost all of its gains by the end of the trading session.